A second helping of Salemme, more questions about DTV delay

A few more questions about potential conflicts of interest for the man driving …

I'm afraid that between CES and the DTV transition story we ran yesterday, I've been an absent blogger. But here's some interesting additional tidbits I've turned up relevant to that tangled tale. For those who don't feel like wading through the details, the short version is this: Last month, an executive VP at Clearwire named Gerry Salemme very quietly (that is, totally unannounced) took some stored vacation time and joined the Obama transition team as their key advisor on DTV issues. He's been meeting with legislators on behalf of the team rallying support for the call to delay the DTV switchover—among them Sen. Jay Rockefeller (D-WV), who's apparently working on legislation to postpone it right now. In the article, I focused on how Clearwire might benefit from delaying the turnover of 700MHz spectrum, currently being used for analog broadcast, to Verizon, which says it wants to start rolling out LTE (competing with Clearwire's WiMAX) later this year on those bands.

Well, it turns out there's more. On December 16, presumably around the time he was being vetted by the transition team, Salemme resigned from the board of ICO Global Communications, though he remains on the board of ICO North America. ICO just finished testing on a system to deliver hybrid satellite-terrestrial mobile broadband services, including mobile TV, which they were previewing last week at the Consumer Electronics show, even as Obama issued his call for a DTV delay. Both ICO and Clearwire are owned by Craig McCaw—Salemme's boss at Clearwire, in effect—through his private equity company Eagle River. Salemme's campaign finance disclosures variously list him as a "Partner" or "Lobbyist" for Eagle River.

So, what does any of that have to do with the DTV delay? Well, the big news out of the 700MHz spectrum auction was the multibillion dollar purchases by Verizon and AT&T. But Dish Network also shelled out some $711 million for E-block spectrum, on which they've been planning to offer their own mobile TV services. For the acronym lovers, this is called DVB-SH, or Digital Video Broadcasting Satellite services to Handheld. The two big players here are, you guessed it, ICO Global and Dish Network. While ICO was demoing its own mobile video services at CES, Dish Network unveiled its SlingLoaded recorder, which will stream video content to mobile devices a-la Slingbox, via WiFi or 3G networks. The folks at Sling aren't aware of any plans to tie that to the 700MHz spectrum yet, but it does show they're rolling out mobile video, and the logical next step would be to bring that spectrum into play for streaming on the road.

So, to sum up, both Dish Network and ICO are positioned to move into the DVB-SH market very soon. Most analysts think Dish will be using its 700MHz winnings for this purpose. And an employee of the holding company that owns ICO, who sat on ICO Global's board as of a month ago, has joined the Obama team unannounced to help set DTV policy. Shortly thereafter, Obama team announced it would seek a delay that keeps that spectrum out of Dish's hands while ICO works to get its own DVB-SH service up and running.

None of this necessarily means there's anything nefarious afoot; there are strong policy arguments on both sides of the DTV delay question. Still, combine this with the separate Clearwire issues I wrote about Wednesday, and it's just sort of mystifying that Salemme made it through vetting, given what appear to be multiple dimensions of vested interest in the question. Even assuming that everything about the decision-making process is above board, there's a question of disclosure here. That someone about whom so many questions can be raised would join the presidential transition team without any public announcement—without being listed on the Change.gov roster more than a month after coming on board—seems at odds with the new era of transparency and openness Obama has been promising. If Gerry Salemme is going to be telling Obama whether or not we need to delay the DTV transition, Obama at least ought to be telling us about it.

Addendum: The transparency may be lagging, but Clearwire's McCaw clearly understands the new spirit of bipartisanship Obama likes to talk about: In the 2008 cycle, he not only maxed out his donations to both Barack Obama and John McCain, he gave $28,500 to the Republican National Committee, and another $30,800 to the Democratic National Committee.

Addendum II: I'm slapping my forehead a bit, because I omitted an even more important competitor: Qualcomm is champing at the bit and ready to go with a mobile TV service they're hoping to expand into 100 new markets. They can literally be up and running the day the spectrum is turned over, so even the relatively short four-month postponement now being floated keeps them out of the market for exactly four months during which they could otherwise be building market share. The competing ICO service is unlikely to get off the ground before 2010.